At the Tipping Point

In the first eight months of this year, there were 10 national magazines with environmental cover stories. I lost track of the front-page and feature articles in other major print media sources. Radio, television, and Web stories -- impossible to track. Search for the keyword "environment" and you get more hits (2.2B) than "sex" (845M), "drugs" (443M) and "rock & roll" (21M). In keeping with a 60s genre -- you don't need a weatherman to know something different is in the wind This month we explore what direction the wind is blowing and the forces driving it.

Tectonic shifts are always preceded by numerous, seemingly random events -- rumblings, as it were. Viewed in hindsight, these early indicators can be linked together easily into the story of how and why the shift occurred. In realtime, however, we are surrounded by so much day-to-day noise that it is hard to sense when another major transition is upon us. It is long after the tipping point that the transition is recognized and labeled. Only then do the full implications of the change reveal themselves. I'm a baby boomer, but in 1946 no one was calling me that or worrying about my impact on Social Security.
Sometime these shifts can brew for years, only to appear suddenly overnight. For example, 9/11 launched the "war on terrorism" that, in reality, began years earlier. Environmental issues develop especially slowly, in part, because of the buffering capacity of Mother Nature. Yet, while the evolution of these issues can take decades, public awareness still changes rapidly in comparison.

Environmental concerns in the United States have undergone two major tectonic shifts or "waves." The first wave was the conservation moment that began back in the mid 1800s and continued up until World War II. The environmental game back then was all about the creation of national parks and the protection of wilderness areas. It had little to do with the industrial revolution and corporations.

The second wave was the regulatory movement that began in the mid 1960s, thrust forward by the public's realization that industrial pollution was out of control. It had everything to do with industry. The book Silent Spring, by Rachel Carson is often credited for initiating this movement, and by the mid 1990s Americans could point to major improvements in their rivers, coastal areas, air, and land. These successes, gained through regulatory intervention, led, however, to complacency on the part of the public, politicians, business executives, and media. That is, until recently.

Early Signposts
For more than a decade, I have traveled the rubber-chicken circuit giving speeches to environmental professionals and business managers warning that major change was underway and suggesting ways to prepare for the next environmental wave. Early and obvious indicators were few and I was met with glazed looks of disbelief from many. Most were still reveling in the successes of the past and celebrating progress on what they considered the next wave -- "sustainable development."

Over the past year, however, audience reaction has changed significantly. Most now realize that companies are facing another challenge, even more sweeping than the last. If there is any doubt, it has more to do with disagreement on how to respond rather than whether change is occurring. What caused this shift in understanding and awareness?

For me, there were several clear signposts that a much broader audience was beginning to recognize that something is in the works. The first was the September 2004 essay "Death of Environmentalism," which was based on interviews with 25 leaders in the mainstream environmental movement. The authors, Michael Shellenberger and Ted Nordhaus, pointed out to environmental activists that their system of crafting and responding to regulations was fundamentally defective. Up until that point, all the finger-pointing and bitching was directed at industry or state and federal regulatory agencies.

The second was a four-part, front-page series by Peter Waldman, "Toxic Traces -- New Questions about Old Chemicals," in the Wall Street Journal beginning in July 2005. It was at the opposite end of the spectrum from a Fortune article two years earlier which pointed out, in effect, that a little poison may be good for a person (a phenomenon called hormesis). The Journal's series was also in stunning contrast to the usual editorial position that environmental concerns are overblown.

Finally, in January 2006, Fortune ran a feature article, "Cloudy with a Chance of Chaos," that disclosed a Pentagon study of the possible impact on world stability if the Gulf Stream were to suddenly stop due to global warming. The article surprised many, including me. First, because it was information the government (and especially the current administration) would typically classify as secret; and second, because it also drove home the point of how suddenly global environmental shifts can occur. The concept of "non-linear" or "switch vs. dial" climate events was thrust forward as a worrisome possibility.

Forces of Change -- The Perfect Storm
The preceding three signposts made me recognize that environmental professionals and business managers were sensing change. But when and why did the public's awareness also begin to shift?

Concern for one's backyard (as in NIMBY, Not-In-My-Back-Yard) has always been pre-eminent, but public interest in global environmental issues reached bottom in March 2005. It is important to keep this date in mind, since it illustrates how quickly things shifted. In that month, the United Nations (UN) Millennium Ecosystem Assessment Synthesis Report was released, claiming that 15 of 24 ecosystems are being degraded or used unsustainably. If your doctor said that 60 percent of your vital signs are headed toward a flat line, you would be in a state of panic. But the reaction to the UN report could best be described as complete indifference.

And then Hurricane Katrina hit.

There have been scores of devastating hurricanes in the past, but Katrina was followed by scientific explanations of what impact human activities might be having on the environment. Strange weather -- be it drought in the Southwest, floods on the coasts, or tornados in the center -- was something that Americans were experiencing widely. It was now not just about an isolated event, a killer heat wave over in Europe or an ozone hole over the Antarctic. This was personal and people were starting to connect the dots between possible cause and effect.

The weather was not the only source of pain. Gas prices at the pump shot up...again. But this time the public also learned about "peak oil" and the fact that some resources are finite and likely to get much more expensive, especially if greenhouse-gas emissions are to be reduced. The spectacular growth of China and India was in the news, and it did not take too much imagination to visualize what would happen if other people started to live like Americans. China experienced a massive benzene spill to the Songhua River, and it was déjà vu the Cuyahoga River in Cleveland, 1969.

Just how small and vulnerable the world might be was driven home by media reports of the threat of pandemics spread by international travel. If these "traditional" health concerns were not enough, emerging issues over nanotechnology and biotechnology were added to the mix. Another mega-shift in technology -- the Internet -- is changing how fast, far, and wide all of this information is communicated.

Rising anxieties over the environment are now being propelled forward by 2006 mid-term election and 2008 presidential politics. Without a doubt, Bush-bashing by the Democrats and others dissatisfied with the administration's environmental track record is driving much of the media frenzy seen today. (For more information on this subject see my Manager's Notebook column, "Environmental Politics and Strategy," Environmental Protection, September 2006.)

Nongovernmental organizations (NGOs) and other government agencies outside the United States are filling the leadership gap. For example, the European Union is now setting an alphabet soup of new rules e.g.: Waste Electrical and Electronic Equipment (WEEE), Restriction of Hazardous Substances (RoHS), and Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) that multinational corporations must consider. Public trust in government remains an issue, especially in the wake of continuing financial scandals. The U.S. Environmental Protection Agency (EPA) appears less and less relevant.

There are dozens of other factors that are forming a perfect storm for change. Certainly the insurance industry is literally and figuratively at the center of this storm. But other major corporations are responding: GE initiated "Ecomagination"; Wal-Mart is on a green campaign; Duke Energy is breaking away from the traditional utility sector mindset; the Business Roundtable created the Society, the Environment and the Economy or "S.E.E. Change" initiative; and so on. Partnerships with and certifications by NGOs are very much in vogue. How else will the public believe your "greenness"?

The Bottom Line
It remains to be seen how much of this renewed interest by industry in the environment is just another public relations effort or a serious attempt to affect positive change. There is already growing backlash with the term "sustainable development"; some claim that the notion has been hijacked by industry to deflect attention from the real issues. That would be a major mistake on industry's part.

A fundamental shift is underway that will not be brushed off by public relations. Believing that this recent shift is only about climate change and, therefore, of little relevance to your particular business, is another fatal flaw in logic. It is akin to believing in 1965 that the media attention to DDT and birds has no future relevance to businesses.

The core issue is that the environment has moved from something "theoretical / the other guy / tomorrow" to "reality," directly affecting Americans in scores of new ways, from oil prices to weather to insurance rates. Another Katrina-like event could propel the public's concern over the top. Regulatory intervention is inevitable. Indeed, it has already started at the state level. Is your company strategically positioning itself for this third wave?

This article originally appeared in the 11/01/2006 issue of Environmental Protection.